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Operators warn of unfriendly business environment at ports

By Adaku Onyenucheya
03 February 2021   |   4:03 am
As Nigerians still grapple with the rise in inflation, maritime operators have projected tougher days ahead for the country if the government does not address the unfriendly policies affecting players in the sector.


• Say CBN policies may worsen inflation
• ‘100 containers of perishable items stranded at Lagos Port destroyed’

As Nigerians still grapple with the rise in inflation, maritime operators have projected tougher days ahead for the country if the government does not address the unfriendly policies affecting players in the sector.

They warned that if the government does not address challenges causing the rise in inflation in the maritime sector as soon as possible, Nigerians should be ready to face hyperinflation.

The President of Shippers Association, Lagos State (SALS), Rev. Jonathan Nicol, lamented that shippers are faced with multiple challenges ranging from the evacuation of empty containers out of cities, sapping container deposits from shippers, demurrages, congestion in berthing and unexpected bills from the carriers.

He said with the challenges, shippers are helpless, knowing that at the end of the day, the expenses are pushed to the general public, which he said, adds to inflationary pressure.

Nicol warned that some industries might shut down in 2021 if something is not done to correct the situation quickly.

He pointed out that the collapse of the country’s import adjustments policies had affected importation negatively, noting that the Nigerian Customs Service (NCS) had been given a blank cheque to pursue revenue at all cost, thereby jettisoning the trade facilitation under the World Customs Organisation Treaties.

Nicol warned that many goods would be abandoned owing to the inability of importers to clear their cargoes, as the cost of clearing is higher than the value of goods. He appealed to the government to restructure the import policies, adding that major investors had dumped Nigeria for other countries because their investments could not be protected.

Commenting on the effect of the inflation on the maritime sector, the National Deputy President, Air Logistics, the National Association of Government Approved Freight Forwarders (NAGAFF), Dr. Segun Musa, said the impact of inflation on importation affects the profitability of businesses.

He said rather than talking about inflation, the discussion should move to the factors that led to the escalation and how they could be solved.

He said the government does everything possible to increase revenue to the detriment of businesses, adding that when the landing cost of containers is extraordinarily high due to the cost of transportation and clearing, inflation pressure goes up.

“If you are importing any container, let’s say transporting a 20ft container by sea from China to Apapa, you pay $2, 000. It is the same amount you pay to transport the container from Apapa to Ikeja, which is about N1 million; that is if you are lucky. Before now, it was N90, 000.

“This will affect the volume of importation and landing costs. If you are importing about 20 containers before, you will find it very tough to import 10 now,” he stressed.

Musa accused the government of deliberately frustrating exportation, saying: “They are only interested in importation where they make their revenue. The revenues are collected in such a way that it prevents importers that cannot cut corners to stop business. These are the factors that lead to inflation.”

He said the government is frustrating the maritime sector through the Central Bank of Nigeria (CBN), lamenting that hundreds of containers of perishable items stranded at the ports have perished due to the unfriendly policy of the CBN.

“You can’t even invest your money in export. All the necessary things that CBN insisted that exporters should get are not available. So, it is just an effort to frustrate businesses in Nigeria. The government is not interested in exportation, but importation where they generate revenues at the detriment of the economy,” he said.

Speaking on the effect on shipment, the National President, African Association of Professional Freight Forwarders and Logistics of Nigeria (APFFLON), Frank Ogunojemite, said the continuous rising exchange rate has affected the cost of container shipment into the country, which he said is also a major contributor to rising costs of goods.

Ogunojemite lamented that the poor state of port operations adds to the cost of bringing commodities into the country and allows for capital flight, especially as shipping and terminals operators collect demurrages due to the poor state of infrastructures and other factors impeding the ease of doing business.

This, he said, has drastically affected the contribution of the maritime sector to the country’s Gross Domestic Products (GDP).

The Public Relations Officer, Association of Nigerian Licensed Customs Agents (ANLCA), Tin Can chapter, Emmanuel Onyeme, said the cost of shipping a consignment from China to Apapa, which was formerly N900, 000 has risen to about N1.5 million due to weaker local currency.